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Minimum Wage Cheat Bosses to be Named

Small Business News

30th September 2010

National Minimum Wage Annual Report for 2009/10Employers who deliberately flout minimum wage laws will be publicly named under a new scheme announced by Employment Relations Minister Edward Davey today.

Cases where employers breach the rules are to be publicised by the Department for Business, Innovation and Skills (BIS) from 1st January 2011 - giving them three months to 'put their house in order'.

The new sanction was announced as the new rates for the National Minimum Wage come into effect. They are:

  • £5.93 per hour for low paid workers aged 21 and over, increased from £5.80 and with the adult rate coming into effect at 21 rather than the previous 22;
  • £4.92 per hour for 18-20 year olds, increased from £4.83; and
  • £3.64 per hour for 16-17 year olds, increased from £3.57.

For the first time there is also an apprentice minimum wage of £2.50 per hour. The new rate applies to those apprentices who are under 19 or those that are aged 19 and over but in the first year of their apprenticeship. All other apprentices are entitled to the standard minimum wage rate for their age group.

Employment Relations Minister Edward Davey said:

“Bad publicity can be a powerful weapon in the fight against employers who try to cheat their workers and their competitors. Their reputation can be badly damaged if they are seen to be flouting the law.”

“Responsible employers should also make themselves aware of the new rates that come into effect (1 October). The increases to the National Minimum Wage this year are appropriate for the economic climate. They will strike a balance between helping the lowest paid whilst at the same time not jeopardising their employment.”

“The Low Pay Commission estimates that around 970,000 people stand to benefit from these increases.”

The new rates come in as Her Majesty’s Revenue and Customs (HMRC) and BIS publish their National Minimum Wage Annual Report for 2009/10 (PDF). It reveals HMRC identified over £4.4 million in arrears for over 19,000 workers. The average arrears per worker for the year were £228, which is 18% higher than the previous year (£193 for 2008/9).

Regulations cracking down on rogue operators in the modelling and entertainment sector - banning up-front fees for aspiring models and significantly tightening the conditions attached to them elsewhere - also come into force on the 1st October.

They are part of the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010. Taken in the round this legislation reduces overall regulatory burdens by eliminating unnecessary suitability checks when workers are placed in permanent posts – except when the work involves vulnerable people.